Free trade agreement with South Korea will boost US auto industry: Obama

Chevrolet Sonic 2012, built in Michigan: bailout of auto industry "paid off" according to President Obama

The United States and South Korea signed a free trade agreement this week and to celebrate, the two leaders visited a General Motors plant in Michigan on Friday. The plant had been scheduled to close before the bailout of the US auto industry in 2009. It produces the Chevy Sonics, one-quarter of whose parts comes from South Korea.

President Obama said that his government had refused to let the plant close down. We made a deal with the auto companies, he said: if they were willing to "get more efficient, get better, get smarter" then his government would be willing to invest in them. "Today I can stand here and say that investment paid off."

The South Korean president, Myung-bak, said that he was confident the factory would continue to "make good cars." He promised that the free-trade agreement would not "take away any of your jobs."

The agreement with Korea provides GM, Ford and Chrysler wider access to the Korean market, while protecting the US against a surge of imports from automakers like Hyundai. The deal will end tariffs on 95 per cent of US exports of industrial and consumer goods within five years, and support about 70,000 American jobs, according to the White House.

Obama called the deal a "major win," anticipating increased exports, support for jobs and protection of labour rights and the environment.